BUSINESS
ENVIRONMENT
LECTURE NOTES
, CONTENTS
Chapter Title Page No.
I Business 5
II Objectives of Business 28
III Business Environment 53
IV Objectives and Social Responsibilities of Management 75
V Dynamics of Organizational Structure in India 94
, CHAPTER - I
BUSINESS
OBJECTIVE
Business is the social science of managing people to organize and maintain collective
productivity toward accomplishing particular creative and productive goals, usually to generate profit.
The etymology of “business” refers to the state of being busy, in the context of the individual
as well as the community or society. In other words, to be busy is to be doing commercially viable
and profitable work.
The term “business” has at least three usages, depending on the scope — the general usage
(above), the singular usage to refer to a particular company or corporation, and the generalized usage
to refer to a particular market sector, such as “the record business,” “the computer business,” or “the
business community” — the community of suppliers of goods and services.
The singular “business” can be a legally-recognized entity within an economically free society,
wherein individuals organize based on expertise and skills to bring about social and technological
advancement.
In predominantly capitalist economies, businesses are typically formed to earn profit and
grow the personal wealth of their owners.
The owners and operators of a business have as one of their main objectives the receipt
or generation of a financial return in exchange for their work — that is, the expense of time and
energy — and for their acceptance of risk — investing work and money without certainty of success.
Notable exceptions to this rule include some businesses which are cooperatives, or
government institutions.
However, the exact definition of business is disputable as is business philosophy; for example,
some Marxists use “means of production” as a rough synonym for “business”; however a more
accurate definition of “means of production” would be the resources and apparatus by which products
and services are created.
Control of these resources and apparatus results in control of business activity, and so, while
they are very closely related, they are not the same thing.
5
, Socialists advocate government, public, or worker ownership of most sizable businesses.
Some advocate a mixed economy of private and state-owned enterprises.
Others advocate a capitalist economy where all, or nearly all, enterprises are privately
owned.
MEANING
The term “business” typically refers to the development and processing of economic values
in society. Normally, the term is applied to that portion of economy whose primary purpose is to
provide goods and services for society in an effective manner. It is also applied to economic and
commercial activities of institutions having other purposes, such as the business office of a film,
association.
“Business comprises all profit-seeking activities and enterprises that provide goods and services
necessary to an economic system. It is the economic pulse of a nation, striving to increase society’s
standard of living. Profits are a primary mechanism for motivating these activities.”
“Business is any enterprise which makes, distributes, or provides any article or service which
other members of the community need and are able and willing to pay for. “
Business may be defined as “the organised effort by individuals to produce goods and services
to sell these goods and services in a market place, and to reap some reward for this effort.”
Functionally, we may define business as “Those human activities, which involve production
or purchase of goods with the object of selling them at a profit.” In essence, business represents an
organised effort by an individual or individuals engaged in making a living. Each firm furnishes goods
and services to others, and each operates with the aim of furnishing some return to its members.
CHARACTERISTICS OF BUSINESS
Business possesses the following characteristics:
1. It is the business of “business” to provide goods and services to the people. It provides
the public with the things it needs and wants in order to survive, enjoy life, and improve in a
6
ENVIRONMENT
LECTURE NOTES
, CONTENTS
Chapter Title Page No.
I Business 5
II Objectives of Business 28
III Business Environment 53
IV Objectives and Social Responsibilities of Management 75
V Dynamics of Organizational Structure in India 94
, CHAPTER - I
BUSINESS
OBJECTIVE
Business is the social science of managing people to organize and maintain collective
productivity toward accomplishing particular creative and productive goals, usually to generate profit.
The etymology of “business” refers to the state of being busy, in the context of the individual
as well as the community or society. In other words, to be busy is to be doing commercially viable
and profitable work.
The term “business” has at least three usages, depending on the scope — the general usage
(above), the singular usage to refer to a particular company or corporation, and the generalized usage
to refer to a particular market sector, such as “the record business,” “the computer business,” or “the
business community” — the community of suppliers of goods and services.
The singular “business” can be a legally-recognized entity within an economically free society,
wherein individuals organize based on expertise and skills to bring about social and technological
advancement.
In predominantly capitalist economies, businesses are typically formed to earn profit and
grow the personal wealth of their owners.
The owners and operators of a business have as one of their main objectives the receipt
or generation of a financial return in exchange for their work — that is, the expense of time and
energy — and for their acceptance of risk — investing work and money without certainty of success.
Notable exceptions to this rule include some businesses which are cooperatives, or
government institutions.
However, the exact definition of business is disputable as is business philosophy; for example,
some Marxists use “means of production” as a rough synonym for “business”; however a more
accurate definition of “means of production” would be the resources and apparatus by which products
and services are created.
Control of these resources and apparatus results in control of business activity, and so, while
they are very closely related, they are not the same thing.
5
, Socialists advocate government, public, or worker ownership of most sizable businesses.
Some advocate a mixed economy of private and state-owned enterprises.
Others advocate a capitalist economy where all, or nearly all, enterprises are privately
owned.
MEANING
The term “business” typically refers to the development and processing of economic values
in society. Normally, the term is applied to that portion of economy whose primary purpose is to
provide goods and services for society in an effective manner. It is also applied to economic and
commercial activities of institutions having other purposes, such as the business office of a film,
association.
“Business comprises all profit-seeking activities and enterprises that provide goods and services
necessary to an economic system. It is the economic pulse of a nation, striving to increase society’s
standard of living. Profits are a primary mechanism for motivating these activities.”
“Business is any enterprise which makes, distributes, or provides any article or service which
other members of the community need and are able and willing to pay for. “
Business may be defined as “the organised effort by individuals to produce goods and services
to sell these goods and services in a market place, and to reap some reward for this effort.”
Functionally, we may define business as “Those human activities, which involve production
or purchase of goods with the object of selling them at a profit.” In essence, business represents an
organised effort by an individual or individuals engaged in making a living. Each firm furnishes goods
and services to others, and each operates with the aim of furnishing some return to its members.
CHARACTERISTICS OF BUSINESS
Business possesses the following characteristics:
1. It is the business of “business” to provide goods and services to the people. It provides
the public with the things it needs and wants in order to survive, enjoy life, and improve in a
6
